Venezuela: With gasoline prices in the United States at all-time highs–over $6 per gallon in California–the pressure is on the Biden Administration to vigorously pursue ways to lower prices. With U.S. production stagnating at more than a million barrels per day shy of pre-pandemic levels, and with major oil consumers such as Europe looking for alternate supplies, the situation has grown worse, despite the Administration’s first step of releasing millions of barrels of oil from the SPR. Even though there were 5 million barrels of crude released from the SPR last week, the EIA showed a major draw of more than 3 million barrels. A month ago, the United States was said to look to Venezuela–sitting atop the world’s largest oil reserves–for additional oil, but it was rumored to come away empty-handed. Now, the United States is granting Chevron a license to negotiate with PDVSA to strike up oil deals. Venezuela’s heavy oil is perfectly suited for many American refineries. It is likely to be just the first of many steps in lightening up sanctions on Venezuela’s oil industry, and as many as 400,000 bpd of oil could be added to global supplies if sanctions were relaxed.
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